Sunday, 19 October 2014

Who develops, shapes and controls organizational culture?

Corporate culture is increasingly gaining employers
attention in that it is supposed to have a remarkable impact on individual
behaviour: “the way we do things around here” and ultimately on businesses
performance. Whether employers and their management could be able to control
corporate culture, these would be in a position to influence individual comportment
in the workplace and the degree of employee contribution to organizational
success.

Academics, practitioners
and managers, nonetheless, formulate and support different theories and ideas
so that it can be hardly averred that a widespread agreement as regards this
subject actually exists. All in all, these theories can be grouped into two main
categories: those who support the idea that culture is “something an
organization is” and managers cannot hence manipulate or control (Silver, 1987;
Smith and Peterson, 1988 and Ackroyd and Cowdy, 1990) and those averring that in
order to attain organizational efficiency and effectiveness corporate culture
needs to be controlled by a company management (Ouchi, 1981; Peters and
Waterman, 1982 and Smith, 1992).

Trying to determine whether corporate culture can be actually
shaped and controlled by an employer can prove to be quite a conundrum; to this
extent taking heed of the genesis of corporate culture can prove to be a good
starting point. The first question to answer hence is: does culture actually
develop or is it rather defined and shaped by the company founders and subsequently
handed down through the generations?

Whether we support the idea that organizational culture stems
from the shared values on which individuals base their common beliefs and
develop the group norms, which ultimately influence their behaviour and are
reinforced by the positive results it enables these to yield, we should
conclude that corporate culture can be hardly controlled or manipulated by a
business management. Notwithstanding, in many cases organizational culture is
actually defined by the company founder who expects that this will be
subsequently handed down by the business management through the generations.

In the former case corporate culture can be considered as
the outcome of a rather slow and habitually relatively long process where all
individuals are or can be potentially involved; whereas in the latter case
organizational culture is somewhat of an off the shelf package, it has been
prepared and prepackaged by the founder and fostered and implemented within the
business with the help of the organization management.

The example of the Disney Enterprises is one of the most
fascinating and remarkable in this sense and can definitely help to identify
some crucially important aspects.

In order to clearly
communicate and express his vision of the company and the culture he desired to
foster, we go back to the early 1950s, Walt Disney had recourse to the
figurative language, more precisely to the metaphor of organization as drama or
theatre. Customers were thus called “guests”, employees were known as
“casting”, the ticket boots were called “box offices”, the dress code
“costuming”, a clear difference between “back-stage” and “on-stage” was made
with reference to the different areas of the park and everyone was essentially
acting according to the Disney script.

Albeit staff at Disney used an unconventional business wording,
the metaphor of drama was absolutely consistent with the requirements of a
typical for-profit organization. Each individual basically played a precise
role, within a structured framework, aiming at favouring the attainment of a
specific business-related objective (Smith and Eisenberg, 1987).

By reason of the paternalist and friendly approach adopted
by Disney, many employers had also developed the idea that an additional
metaphor could have been used to describe the park culture, that is, the
metaphor of organization as a family.

Things changed dramatically
when Walt Disney died in 1966. Walt, as he wanted to be called by the park’s
employees, was charismatic both as a founder and as a leader and after his demise
the park management literally strived to cope with his absence. Insofar as in
the 1980s employees harshly complained that the management was sensibly
diverging from Disney original vision and that they were the only people who
were truly caring to keep faith to Disney’s genuine view (Smith and Eisenberg,
1987). As suggested by Martin et al (1985), the circumstance that a founder might
hand over an organization culture as a legacy can be considered questionable, insofar
as the Authors defined this option as “seductive promise.”

The employees desire to preserve Disney’s original vision
led these to re-interpret the metaphor of the park culture putting much more
emphasis on the metaphor of family, rather than on that of drama; a reinterpretation
which Walt would have not possibly supported himself. The park management, in a
bid to cope with these adversities, developed the “Disney philosophy” based on
the image of the park as a friendly place, first-name-based and where teamwork
was crucially important (Smith and Eisenberg, 1987).

These values and beliefs gained a widespread acceptance and
consolidated rather quickly within the business. Employees treated the park visitors
as their personal guests and were expected to receive the same treatment from
the park management, which actually did not take any particular action to redress
employee expectations. In contrast, managers adopted a paternalistic style and
people feel so at ease working at Disney insofar as nobody did even consider
leaving the company; working at Disney was ultimately considered somewhat of “a
way of life”, rather than a job.

In the early 1980s the
external environment played a sorely remarkable role and made quite an impact
on the organization and its people. The growing pressure exerted by competitors,
some company takeover attempts and the increasing level of the operating costs
accounted for the company management needing to pay extra care to the cost-containment
side of the park administration. Yet, the findings of an industry-related salary
investigation revealed that wages at Disney where 62 percent higher than those
offered by the other employers of the same industry so that in 1984 the park
management proposed a two-year pay freeze and the elimination of some benefits
for the employees who would have joined the company hereinafter.

The need for this profound, revolutionary change was
essentially based on economic and financial grounds and was negatively
perceived by staff, who considered the interference of the economic and
financial factors as threatening the stability of the Disney family and in open
contrast with Walt’s original vision. Despite Disney was also remembered by
staff as an acute and clever entrepreneur, as it has to be, very focused on the
profitable side of his business too. Discontent and malaise culminated in an
unprecedented 22-day strike. The park managers tried to persuade the employees
that the proposed sacrifices were actually necessary and essentially consistent
with the metaphor of the organization as a family in that when a family is
experiencing difficulties the family members need to jointly tie the belt and
make some sacrifices. Notwithstanding, employees rejected this management
argument, which was tantamount to a distort re-interpretation of Walt’s vision.
At that stage, the park management clearly realized that some permanent changes
needed to be introduced (Smith and Eisenberg, 1987).

Employees and management come thus to an inevitable, open
and indeed marked contrast. Employee concern, however, was not actually mainly due
to the financial sacrifices the new circumstances required, but rather to the different
management interpretation of Walt’s philosophy and the amendments made to the
park policies as a consequence of that re-interpretation.

The aftermath of these events was really severe, especially
in terms of human relations. Some employees perceived managers as enemies
insofar as restricting the metaphor of family to the employees only, with the
exclusion of the organization management. Indeed, contrasts also spread amongst
employees. The difference in salaries between the people recruited after the
abolition of some benefits and the “old employees”, who were still entitled to
enjoy those benefits, clearly generated divisions and tensions amongst
employees too.

Some complications were also caused by the confusion generated
by some opposing preferences expressed by staff. Despite some employees enjoyed
the care for the individual, which the old paternalistic approach used by the
management entailed, many others did prefer not to be considered like children
and wanted to have their say on the design and development of the future “life
at Disney.”

All of these events gave rise to a strong resentment amongst
staff and to a clear split between employees and management which had a
long-lasting remarkable impact on the business performance and on both staff
motivation and morale.

At Disney organizational culture has over time generated
from different sources. Culture was originally shaped by the charismatic founder
and widely recognized strong leader, that is, Walt Disney; whereas subsequently
it was developed and to some extent manipulated by employees. In both cases the
business management played a limited, if any, role in defining the corporate
culture.

This case also shows the significance of the impact and role
played by the external environment. Life at Disney essentially changed when
after the economic prosperity of the mid-1960s the external economic
circumstances changed dramatically in the early 1980s. The worsening market
conditions in fact sensibly, negatively influenced the park atmosphere and
exacerbated internal human relations; in the first place between management and
employees, soon after also amongst staff.

The endogenous environment actually contributed to add fuel
to the flames too. The idyllic atmosphere which had characterized the park during
the previous decades of its establishment had in fact accounted for managers
and staff never having managed conflicts so that, the moment arrived, both
parties were not used and prepared to manage these (Smith and Eisenberg, 1987).
Somewhat ironically perhaps, in this case, the nonexistence of previous
conflicts made it harder the conciliation process between the two parties
involved.

The Disney Enterprise experience also shows that whether the
development and control of organizational culture are entirely left on employee
hands, the final result may not fully fulfil the business leaders’ real expectations.
When corporate culture is shaped by the founder not only culture has to be
embraced by the existing employees, but also the identification of the future
recruits has to be based on their capability to adapt, or rather, naturally fit
the employer vision. In the Disney case, employees could re-interpret the founder
vision of organizational culture in that the park management did not continue
to strongly and firmly support it and did virtually nothing to redress employee
deviating views.

The more charismatic a company founder, the stronger the
impact of the culture this shapes and introduces within his/her business. Yet,
the more recognized the founder leadership qualities, the easier for this to
foster the desired culture and the likelier that individuals will keenly and
eagerly embrace this; Apple’s Steve Jobs and Microsoft’s Bill Gates are two
remarkable examples of this in modern times.

When a founder is a strong genuine leader and a charismatic
person it is indeed also very likely that stories, narrations and myths where
the founder plays the role of the hero can effectively help the business to
hand down culture through the generations.

Despite this might not always be the case, Disney’s lessons
learned book definitely supports the Ouchi, Peters and Waterman, and Smith
view: to attain organizational effectiveness and efficiency corporate culture
needs to be shaped and controlled by management. It can be added, and
particular attention needs to be paid to the exogenous environment for the impact
this can potentially make on it.

It could be argued that culture tends to develop, and hence
to be managed by employees, when no charismatic founder or genuine leader is
shaping it or, more in general, when the business management is unable to shape
and effectively, influentially and convincingly foster it. It is in fact hardly
imaginable that corporate culture may be developed by employees whether a
charismatic founder or a strong leader has shaped it and the business
management is strongly supporting this. By contrast, the management lack of
initiative and support to an even strong corporate culture might account for
this drastically weakens over time and for employees developing and supporting
a new or different culture, which in some cases, albeit diverging or sensibly
diverging from this, may also be the fruit of the re-interpretation of the
original culture (as, for instance, in the Disney case).

The role and support of informal leaders might reveal to be paramount.
Especially in the absence of a genuine leader amongst the business management,
these may make or break corporate culture. Regardless of the specific
circumstances, the informal leaders support to foster corporate culture is definitely
invariably important.

It can be concluded that in
practice corporate culture can be either shaped by a company founder or management,
or developed by the employees. The latter process, however, is much more likely
to be triggered by the absence of a charismatic founder or of a genuine strong
leader amongst the business management, or can be initiated by employees to
fill the vacuum left by the company management. Yet, the circumstance that
corporate culture is developed by the employees not necessarily entails that
this meets the employer expectations and wants and that it is consistent with
the employer strategy and objectives. In actual fact, organizational culture
should support the business strategy and policies, and needs thus to align with
these. A business culture exclusively developed and shaped by employees can hardly
enable employers to fully attain this objective.